"These guys can shrug their shoulders and tell us it is all going to be fine, knowing very well that this stuff could take months, could take years while consumers suffer and the Fos isn't fit for purpose to address it, both in terms of resources and, in my view, powers to get this sorted.
"What we have is a systemic problem of consumers not being shored up by institutions of Fos because of resources and internal issues as well as powers."
His 53-page review of the Financial Ombudsman Service, published earlier this month, was launched after allegations made in the Channel 4 programme Dispatches that some decisions made by ombudsmen may have not been fair to consumers.
Mr Lloyd largely exonerated the Fos but he warned the service's strive for efficiency had begun to be seen by staff at the service as the "overriding priority" and he recommended that management shift the focus onto quality.
Another concern raised by Dispatches was that investigators did not have the knowledge to handle complaints, and Mr Lloyd found this could be the case for people new to the role - particularly given the Fos' move to a new model without specialisms.
Mr Lloyd said some of the issues raised by Dispatches were caused by the recent reorganisation which changed how complaints are handled.
The Fos' reorganisation has been taking place since 2016 with the aim of making it more responsive, and has consisted of a new structure where the person who first receives the complaint will consider the complaint - regardless of whether it is about a type of product they have specialist knowledge of or not.
Under the previous structure complaints were assigned to an adjudicator with specialist knowledge about the type of product the consumer was recommended.
Mr Lloyd said one of the problems with the reorganisation was that it had been "quite top-down" which had affected morale.